The Truth About CRM & ERP Software

I recently spoke with a company at a local user group meeting that was just finishing a quick start CRM system deployment. They shared with me a sentiment regarding their new system that I was becoming very familiar with. Once their system had gone live, it was completely empty. Empty as in; the software was live — you could open the application, click on tabs, configure settings, etc. — however; it didn't really do anything yet. I don't think this is a surprise to anyone who really understands CRM or ERP software, but nonetheless, this large organization was caught off guard by just how little the system actually did once they were simply able to launch the software. This was a topic I could relate to...

CRM, HR, Marketing Automation, and ERP Software are all alike

As the Marketing Director at Datix, I recently decided to implement a new module inside of our current marketing automation software. Once we had finished negotiations with the publisher, I elected to implement the software internally to save money on the implementation. Lucky for my department, I had been through this kind of implementation before, and could leverage the bullpen of software implementation experts inside of our organization to ensure success. Unfortunately, for many businesses implementing CRM or ERP software, this does not end up being the case. You see, once my new software module was available I opened it up and experienced exactly what the gentleman at the user group experienced with his CRM software. The module was completely empty.

CRM, HR, Marketing Automation, and ERP Software are all alike. They all have the potential to streamline processes, scale business practices, increase revenue, decrease costs, and provide the organization with meaningful data; however they don't intuitively do these things. Out of the box, most CRM and ERP software is generally unhelpful to users that don't understand how to configure it, or work with it in the confines of their business processes.

Once our new marketing automation module was available, I opened it up and the dashboard was empty, no campaigns were created, no assets existed, nothing was configured, and all the awesome things that you see in the demo — and imagine yourself doing when you buy the software — were nowhere to be found. Fortunately for me, I knew how to configure the software and our consulting experts helped me with our departments business process models, and we were able to make the software a raving success for our company.

In the last 6 months that software has generated untold ROI, and has since more than paid for itself. This is exactly what every company should strive to achieve when they implement any CRM or ERP software customization, module integration, or completely new implementation. However, if you look at ERP software and CRM system implementation failure rates (projects that are over budget, and not on schedule) you'll find that this is commonly not the case for many.

Where do businesses go wrong?

In reality, the issues that prevent most business from extracting value from the CRM or ERP software harkens back the very beginning of their project. Most businesses rightfully select a software system that best aligns their business processes and the software's ability to fill their specific business requirements. This is usually best demonstrated through the software publishers expert knowledge of what the software can do, and what it could become for that organization. What they don't tell you is that it will take an expert in both the software and your business processes to make the software actually do all the cool meaningful things you see in the demo work inside of your business.

This isn't to hammer the software publishers. They design business altering software that is flexible enough for a number of different organizations. The software is built to need configuration, direction, and input. The problem is that most of the time the people tasked with understanding and implementing the software are different from the people that are tasked with (and understand) the business processes that will ultimately create revenue and decrease costs for your organization.

Ultimately, what happens is that members of an IT team, or software publisher implementation group, perform a general implementation that is designed to generically configure the system and simply get it up and running in a usable fashion. The problem with this is that this form of implementation isn't really designed to generate ROI; at all. What generates ROI is the softwares ability to scale business practices, improve business processes, and provide meaningful information. All of these things usually occur once the software is specially aligned to the business itself, and that usually doesn't happen when IT — or a publishers implementation team — takes the reigns.

A CRM or ERP software failure example

Imagine your a business owner who sees the immense value of all the great things Salesforce or MS Dynamics CRM could help you track, and you create an organization-wide initiative to implement the software. You may assume that once that software is live that you can track all of those meaningful reports the way it was outlined by the software advertisements. The reality is that unless all the right mechanisms were implemented to track those meaningful activities, the reports and dashboards were configured correctly, and the end-users were trained on the system (and then use it), it's likely none of this is even remotely possible. How do you think that business owner now feels about the software. Is it generating the ROI that was expected?

How to generate CRM and ERP software ROI

This piece is beginning to be a bit of downer. But, I want to emphasize that all is not lost. Solving the issues that many businesses face is actually relatively simply. The difficult part is the way things are constructed in the enterprise software industry. Publishers design software for a wide range of companies, leaving it flexible. Business need to understand that, and approach their CRM and ERP software implementations with a goal more defined than simply going live. The goal must be to maximize alignment between business processes and the software's capabilities.

Organizations evaluating how the software can generate ROI and best align to their business should first look at their business processes. How do things work today, how could they work with the new software? What things could be improved, and how would that impact the business? Answering these questions will help determine the effectiveness of the new software, and what type of financial impact it could have.

Next, organizations must select the best way to implement the software so that end users can leverage the software's ability to support the newly designed or accepted business processes. This is generally the hard part. As outlined above, IT can technically accomplish the project, but often can't see exactly how things need to come together from an operational standpoint. Management usually doesn't understand how to scope and execute on the project from a technical standpoint. The software itself is ambiguous, and full of empty promises.

generating ROI and successfully completing a project all comes down to how the project is managed and designed. If your project team understands the importance of effectively balancing business processes with the technical requirements of the software, your project is likely in good hands. Where businesses have trouble is typically when they rely on the software itself to perform all the business altering activities that should really fall on the backs of the organizations business processes that the software itself supports.

Learning more

Our blog is filled with information on to do tasks like this and more. We invite you to explore it.

If your business is struggling to determine the best way to align software with it's business practices give our experts a call. Our consulting team has stepped in at just about every stage of a software project (beginning, middle, end, and way after issues have occurred). They understand the most cost-efficient way for your business to get on the right track. If you have questions or comments please feel free to leave them below.

As the Marketing Associate, Amanda constantly researches new trends in enterprise software as well as the manufacturing and distribution industries to generate fresh content about Datix's premium solutions and services.